You, The Consumer How do I contribute to the economy?

You, The Consumer

How do I contribute to the

economy?

• Consumer– any person or group that buys or uses goods and services to

satisfy personal needs and wants.

04/21/23 Template copyright 2005 www.brainybetty.com 2

Important Terms You Need to Know


• Marketing– All the activities needed to move goods and

services from the producer to the consumer.

• Utility– The ability of any good or service to satisfy

consumer wants.


• the types of utility– Form utility

• The conversion of raw materials into goods and services

– Place utility• Having a good or service available where

consumers want them


• the types of utility– Time utility

• Having a good or service available when consumers want them.

– Ownership utility• The satisfaction that comes from owning a good

or service.




• Disposable income

– money remaining after taxes have been paid.

• Discretionary income

– money remaining after bills have been paid.


• Rational self-interest– Individuals try to maximize the expected

benefit achieved with a given cost or to minimize the expected cost of achieving a given benefit.



Consumer Spending

• 32% Housing and household operation• 14% Food• 5% Clothing• 19% Transportation• 5% Healthcare• 5% Entertainment• 9% Life Insurance, Social Security, and

Retirement plans• 11% Other


Basic Buying Principles

• Gathering Information

• Using advertising wisely

• Comparison shopping


Consumer Rights

• The right to safety• The right to be informed• The right to choose• The right to be heard• The right to redress


Types of advertising

• Competitive advertising– Advertising that attempts to persuade

consumers that a product is different from and superior to any other.




• Informative advertising– Advertising that gives information about a

product.


Billy Mays

Vince



• Bait and Switch (deceptive advertising)– An ad that attracts consumers with a low-

priced product, then tries to sell them a higher-priced product.


A few more terms

• Comparison shopping– getting information on the types and prices

of products available from different stores and companies.

• Warranty– promise made by a manufacturer or a seller

to repair or replace a product within a certain time period if it is found to be faulty.


• Food and Drug Administration (FDA)

– Government agency that protects the public against impure and unsafe foods, drugs, and cosmetics.


• Brand name– word, picture, or logo on a product that

helps consumers distinguish it from similar products.

• Generic brand– general name for a product.

A few more terms


Rules for the Supermarket

• Work the edges– The healthiest foods are found along the walls. Dairy,

meats, produce, and seafood are found there.

• Look high and low– Supermarkets charge “slotting fees” for the prime

real estate on the shelves. That is why the Kellogg’s, Krafts, and Proctor & Gambles have products at eye level. The healthy foods are usually located on the top or bottom shelf.

• Long lines means you buy more– You are 25% more likely to buy the sodas and

candy around you if you have to wait in a long check out line.


Rules for the Supermarket


FDA Regulations

• Canned pineapples can contain up to 20% moldy fruit.• Canned tomatoes can contain up to 5 fly eggs or 2 maggots per

500 grams.• Frozen broccoli can contain up to 60 mites per 100 grams.• Ground cinnamon can contain up to 400 insect fragments and

11 rodent hairs per 50 grams.• Peanut butter can contain up to 30 insect fragments or 1 rodent

hair per 100 grams.• Popcorn can contain up to 1 rodent pellet in one sample or 2

rodent hairs per pound.• Potato chips can contain up to 6% rotten potatoes.

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You, The Consumer How do I contribute to the economy?